Research › Search › Judgment

Madhya Pradesh High Court · body

2017 DIGILAW 408 (MP)

Chandan Singh v. Balko Bai

2017-03-27

SANJAY YADAV

body2017
ORDER 1. With consent of learned counsel for the parties the matter is heard. 2. Defendant No. 2, in a suit for redemption opposed the admissibility of an ikrarnama dated 5.7.1982 executed by Ram Prasad, petitioner's father in favour of Jaisingh from whom he purchased the suit property vide sale deed dated 5.7.1982. 3. Suit for redemption is brought by the legal heirs of Jaisingh on the plea that the sale of the suit property vide sale deed dated 5.7.1982 was in fact a mortgage by conditional sale; however, as the sale deed did not contain an agreement to re-convey, the plaintiff pleaded that a separate agreement has been executed by the purchaser on 5.7.1982. It was this instrument which has been allowed to be admitted in evidence. 4. Evidently, instrument dated 5.7.1982 records the fact wherein purchaser agrees to re-convey the property in question on seller paying back Rs.20,000/-, admittedly the instrument is not registered. 5. Clause (c) of section 58 of Transfer of Property Act provides for mortgage by conditional sale. Proviso to clause (c) stipulates that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale. 6. In Chunchun Jha v. Ebadat Ali and another [( AIR 1954 SC 345 )], while dwelling on the issue as to whether which instrument would construe a mortgage by conditional sale, it has been held : 12. The next step is to see whether the document is covered by section 58 (c) of the Transfer of Property Act, for- if it is not, then it cannot be a mortgage by conditional sale. The first point there is to see whether there is an "ostensible sale." That means a transaction which takes the outward form of a sale, for the essence of a mortgage by conditional sale is that though in substance it is a mortgage it is couched in the form of a sale with certain conditions attached. The executable clearly purported to sell the property in clause (5) because they say so, therefore, if the transaction is not in substance a mortgage, it is unquestionably a sale: an actual sale and not merely an ostensible one. But if it is a mortgage, then the condition about an "ostensible sale" is fulfilled. 14. The executable clearly purported to sell the property in clause (5) because they say so, therefore, if the transaction is not in substance a mortgage, it is unquestionably a sale: an actual sale and not merely an ostensible one. But if it is a mortgage, then the condition about an "ostensible sale" is fulfilled. 14. Now, as we have already said, once a transaction is embodied in One document and not two and once its terms are covered by section 58(c) then it must be taken to be a mortgage by conditional sale unless there are express words to indicate the contrary, or, in a case of ambiguity, the attendant circumstances necessarily lead to the opposite conclusion.” 7. Similarly in Bhoju Mandal and others v. Debnath Bhagat and others [( AIR 1963 SC 1906 )]; while considering the scope of section 58 clause (c), it is held : 4. There is a clear legal distinction, between the two concepts-a mortgage by conditional sale and, a sale with a condition of repurchase. The former is a mortgage, the relationship of debtor and creditor subsists and the right to redeem remains with the debtor. The latter is an out and. out sale whereby the owner transfers all his rights in the, property to the, purchaser reserving a personal right of re-purchase. The question, to which category a document belongs presents a real difficulty which can only be solved by ascertaining the intend of the parties on a consideration of the contents of a document and other, relevant circumstances... Decided cases have laid down many tests to ascertain the intentions of the parties but they are only illustrative and not exhaustive. Let us therefore, look at the terms of the document extracted above. 7. Reliance is placed by the learned counsel for the appellants on a judgment of this Court in Chunchun Jha v. Sheikh Ebadat Ali [ (1955)1 SCR 174 ]. It may be stated at, the outset that for ascertaining the intention of the parties under one document a decision on a construction of the terms of another document cannot ordinarily afford any guidance unless the terms are exactly similar to each other. It is true that, some of the terms of the document in that case may be approximated to some of the terms in the present document but the judgment of this Court really turned upon a crucial circumstance. It is true that, some of the terms of the document in that case may be approximated to some of the terms in the present document but the judgment of this Court really turned upon a crucial circumstance. There is one important recital found in the document in that case which does not appear in the document in question and there is another important recital found here which is not present there. There the document under scrutiny was executed on April 15, 1930. Before the execution of the document the executants initiated commutation proceedings under section 40 of the Bihar Tenancy Act. Those proceedings continued till February 18, 1931 i.e.' for some ten months after the deed. The executants borrowed Rs.65/6/- to enable them to carry on the commutation proceedings even after they executed the document. Bose.J., speaking for the Court adverting to the said circumstance observed at page 183: "This we think, is crucial. Persons who are selling their property would hardly take the trouble to, borrow money in order to continue revenue proceedings. which could no longer benefit them an could only ensure for the good of their transferees. "It is, therefore, obvious that this circumstance clinched the case in favour of the executants. The crucial circumstance in the present case, namely that a smaller extent was- sold for a higher amount in discharge of an earlier mortgage of a larger extent for a smaller amount was not present in that case. The said crucial circumstances make the two cases entirely dissimilar and therefore the said judgment of this Court is not of any help in construing the document in question. On a consideration of the cumulative effect of the terms of the document in the context of the surrounding circumstances we hold that the document in question is not a mortgage but a sale with the condition of repurchase. The conclusion arrived at by the High Court is correct.” 8. On a consideration of the cumulative effect of the terms of the document in the context of the surrounding circumstances we hold that the document in question is not a mortgage but a sale with the condition of repurchase. The conclusion arrived at by the High Court is correct.” 8. The facts in the present case when tested on the anvil of proviso to clause (c) of section 58 and the law laid down by Supreme Court in Chunchun Jha (supra), and Bhoju Mandal (supra), leaves no iota of doubt that since there were no terms delineated in the sale deed dated 5.7.1982 of re-purchase and a separate instrument was executed by the purchaser on 5.7.1982, said instrument is to be construed as an agreement of resale which being compulsorily registrable under section 17(1) (b) of Registration Act, 1908 and being not registered is not admissible in evidence under section 49 of the Registration Act, 1908. 9. The impugned order when tested on the anvil of aforesaid analysis cannot be given stamp of approval. Consequently, the impugned order is set aside. Petition is allowed to the extent above.